CHICAGO - Kellanova (NYSE: K) announced a robust start to 2024, surpassing analyst expectations for adjusted earnings per share (EPS) in the first quarter, while revenues slightly edged past consensus estimates.
The company reported an adjusted EPS of $1.01, which was $0.16 higher than the analyst estimate of $0.85. Revenue for the quarter was reported at $3.2 billion, marginally higher than the consensus estimate of $3.16 billion. Despite currency headwinds and the prior divestiture of its Russian business, organic sales growth remained strong, and the company sustained double-digit operating profit growth.
Kellanova's stock experienced a modest uptick of 0.8% following the earnings release, indicating a positive but restrained investor response, likely buoyed by the EPS beat. The company's Chairman, President, and CEO, Steve Cahillane, attributed the strong financial performance to improving profit margins and a successful return to full commercial activity, which he believes showcases the resilience and growth potential of Kellanova's portfolio post-spin-off.
Compared to the same quarter last year, reported net sales decreased by 4.3%, primarily due to adverse currency translation and the divestiture in Russia. However, on an organic basis, which excludes these factors, net sales saw a 5.4% increase.
The reported operating profit rose by 13.4%, and the adjusted operating profit, which excludes one-time charges, saw a significant 25.7% increase. The adjusted EPS also saw a notable year-over-year (YoY) increase of 29.5%.
The company reaffirmed its full-year outlook for 2024, projecting organic net sales growth of approximately 3% or better, aligned with its long-term targets. Kellanova anticipates an adjusted operating profit between $1,850 million and $1,900 million, and an adjusted EPS in the range of $3.55 to $3.65. These projections remain consistent with previous guidance, despite ongoing foreign exchange volatility and industry-wide volume pressures.
Cahillane expressed confidence in the company's ability to navigate challenging macroeconomic and industry conditions, stating, "Our ability to deliver these kinds of results amidst challenging macroeconomic and industry conditions is a testament to the more growth-oriented and more profitable portfolio of Kellanova after the spin-off, as well as the talent and determination of our employees who wake up every day intent on delivering results and creating shareowner value."
Investors will continue to monitor Kellanova's performance as it navigates the dynamic global market, with an emphasis on the company's strategic initiatives and its ability to maintain profitability and growth in the face of external challenges.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.